Circle Faces Upgraded Stablecoin Competition: Tether and Wall Street Enter the Market, Can USDC Continue to Lead?

March 11 News: As global stablecoin market competition intensifies, stablecoin issuer Circle, with a market capitalization of approximately $78 billion, is facing challenges from multiple parties. On one hand, stablecoin giant Tether continues to try to expand its influence; on the other hand, many fintech companies and traditional banks are beginning to develop fiat-backed digital currency products. However, Bernstein analysts still believe that Circle has a long-term competitive advantage in the stablecoin sector.

In their latest research report, Bernstein pointed out that Circle has established high barriers in areas such as regulatory compliance, strategic partnerships, liquidity foundation, and technological infrastructure, which create a strong moat in the stablecoin industry. The report predicts that Circle’s stock price could rise from the current approximately $111 to $190, a potential increase of 71%.

The growth of USDC, the stablecoin, is considered one of Circle’s core supporting factors. Despite recent volatility in the crypto market, USDC supply continues to expand. Data shows that the global stablecoin market size has grown from about $131 billion at the beginning of 2024 to over $314 billion now. As one of the main issuers, Circle has become a significant beneficiary of this growth cycle.

Financial data also indicates strong growth momentum. Circle expects its 2025 revenue to exceed $2.7 billion, a year-over-year increase of about 64%. Among the revenue sources, reserve asset yields remain the primary contributor. The company’s transparency report shows that over 84% of reserve funds are allocated in government-backed bonds. Additionally, transaction-related income has become the fastest-growing business segment, with a 112% increase.

Meanwhile, Circle is exploring the integration of artificial intelligence and blockchain in payment scenarios. The company has launched an infrastructure called Nanopayments, supporting small, high-frequency transactions between machines, mainly targeting the potential large-scale AI agent economy of the future. This system is built on the x402 protocol, aiming to enable micro-payments in automated economic environments.

Although the outlook is optimistic among some institutions, competition for Circle continues to intensify. Stablecoin issuer Tether is re-entering the U.S. market and launching a new USD stablecoin, USAT, to challenge USDC’s influence in the region. Additionally, many fintech firms and traditional financial institutions are researching stablecoin issuance to capture the digital payment market.

Against the backdrop of the continuous expansion of the stablecoin market, a competitive landscape among Circle, Tether, and traditional financial institutions is gradually taking shape. The future dominance of the stablecoin industry may depend on regulatory compliance, ecosystem application scope, and the speed of global payment network expansion.